From 'Housekeeping' to 'Gatekeeping': The enhanced role of the company secretary in the governance system

Abstract

The role of the company secretary has been transformed from that of chief administrator of a company to corporate gatekeeper. This transformation has been driven by the increasing importance of capital markets which require transparency and board independence to ensure investor confidence. The attribute of independence is critical to performing the function of corporate gatekeeper by being chief of staff to the chairman and in managing the law and policy compliance programme within a group of companies. The independence of the company secretary is best maintained by a professional code that provides negative criteria. In the event of dismissal, a company secretary should have the right of representation to the board with disclosure in the annual report. While professional services firms, as external services providers, can supply needed expertise, the attribute of independence should be regulated through disclosure of potential conflicts and obtaining shareholder approval. The law should further clarify the rules of attribution to avoid unintended consequences. Finally, confidentiality protection should be given to communications with the company secretary to encourage the use of the office by board members for advice on governance.